Inflation Is Cooling: Jan 2026 Increase Below Seasonal Norms
Seeking Alpha
February 14, 2026
AI-Generated Deep Dive Summary
Inflation showed signs of cooling in January 2026, with the Consumer Price Index (CPI) rising by 0.2 percent—a slight decline from December’s 0.3 percent increase. Year-over-year inflation dropped to 2.4 percent in January, down from December 2025’s figure of 2.7 percent. This marks the lowest year-over-year reading since May 2025. While core inflation, which excludes volatile food and energy prices, rose by 0.3 percent in January—up from December’s 0.2 percent—the overall trend indicates a slowdown in price growth.
The deceleration in inflation was driven primarily by lower shelter and energy costs. These categories have been key contributors to rising prices in recent months, but their cooling helped bring down the overall CPI. Despite this progress, inflation remains above the Federal Reserve’s target of 2 percent. However, the fact that price growth is near a multi-year low suggests that efforts to rein in inflation are having an impact.
This development is significant for investors and market participants, as it may influence monetary policy decisions going forward. While core inflation—which tends to be more stable—rose slightly in January, it remains within a manageable range. The Federal Reserve will likely monitor these trends closely, as they could signal whether further interest rate adjustments are needed to maintain economic stability.
The slowdown in inflation is particularly noteworthy given the risks of an economic slowdown if central banks were to tighten policy too aggressively. For now, however, the data suggests that inflation is cooling more than expected, offering a glimmer of hope for financial markets and consumers alike. This balanced approach to price growth could help sustain economic activity without fueling further inflationary pressures
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Originally published on Seeking Alpha on 2/14/2026